What are Junk Debt Buyers?

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So many bills!Junk Debt Buyers, also called JDB’s, engage in the business of buying distressed assets at pennies on the dollar and then try to collect on that debt. Sometimes they try to go after the full amount, sometimes they’ll accept a settlement amount of 50% or less. It’s not a bad business to be in, except they suffer from one very crucial weakness a smart debt collection fighter knows. When challenged, they can rarely obtain any sufficient documentation of the debt. In other words, they can’t validate the debt after someone has sent a debt dispute letter!

They can rarely provide validation because the original creditors are most likely long gone. They’ve washed their hands of the account once they sold it to the junk debt buyers at such a discount. The information the buyers have may be lost or incomplete. They most certainly lack a proper chain of custody that would prove the junk debt buyers actually own the right to collect on the debt. If you discover that a junk debt buyer has your account (by doing research on the message boards and sites in the first article) you now know that you need to attack their records.

Some may try to produce affidavits from JDB employees who state that a certain amount is due. These may look all fancy, but they are about as valuable in court as toilet paper!

Unless they have an affidavit from an employee of the entity that lent the money, they are going to be out of luck.

Consider the alternative: Suppose I check my records and discover that I actually overpaid the account by $50,000. The company remit the balance due immediately, right? If I can’t produce any records to support that fact, I have no proof. Unless I can produce a company employee to testify to that fact, my claims are baseless.

If you find yourself up against a junk debt buyer, force them to validate and more often than not, they won’t be able to.

(Photo: sercasey)

{ 5 comments, please add your thoughts now! }

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5 Responses to “What are Junk Debt Buyers?”

  1. Patrick says:

    Interesting. Had no clue about junk debt buyers. Even though I am not in debt, it’s good information for anybody to be aware of in case of ending up in a situation where you have debt.

  2. navy2niner says:

    I am going to arrbitration against CACH, llc, they did provide a statement from their office about the bedt being owed and some past credit card statements. But the creditor is not listed on my credit report? I had an account with Providian but they were sold to WaMu and then sold to Chase. p.s. I file my response in a timely manner and counterclaim they asked for an extention and was granted but they missed their deadline by 2 days (their counterclaim had the above info in it. any advise?

    • navy2niner says:

      and the debt is past the 3 years SOL for NC.
      They also tried to provide a copy of the Credit Agreement” stating the attorney’s fee and interest. But the account was opened 12/99 and the only part of the “Credit Agreement” was the attorney’s fee and interest form which is dated 03/00. The form is dated after the account was opened. Neither form had a signature or a name on it. Does the agreement stand?

  3. Brian says:

    Another article showing people how to get out of debt that they owe. Why not advise people to pay their debt instead of hiding behind laws that are there only to prevent fraud. Engaging in this type of behavior is the same as stealing…taking a product and not paying for it.

  4. Dez says:

    I was paying my debt to 1 collection agency after my credit card debt had been charged off as bad debt. This collection agency decided that the payment plan that had been in place for almost a year was no longer going to suffice and shut me down. sold my debt to another credit collection agency. I’m now asking this new agency to validate my debt. Not to try to get out of it but because frankly, I’m tired of dealing with the rudeness of these agencies. I tried to go BACK to the original creditor to deal directly with them, but since they SOLD my debt and wrote it off as a tax write off, I legally cannot send them any more money. So yes, i have been trying to pay this debt but I’m very tired of this run around and power trip that the collection agencies are on. By the way, this is the ONLY glitch on my credit report…. I got behind in payments when my mother passed away and just couldn’t recover from it.

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